Auditor General Heather Jacobs Matthews commented on the audited financial statements of the Consolidated Fund of the Government of Bermuda for the year ended March 31, 2012 which were tabled by the Minister of Finance in the House of Assembly today [Feb 8].

The Auditor General’s opinion contained in the Independent Auditor’s Report is dated November 7, 2012 and was presented to the Accountant General on November 9, 2012.

Mrs. Jacobs Matthews expressed her disappointment that the initial financial statements provided by the Accountant General “required significant adjustments resulting in delays in the audit process and in the issuance of the Independent Auditor’s Report.”

“For the Government not to present complete and accurate financial statements for audit within six months after its year end is not in keeping with current international practice for good government accountability,” she said.

“This unacceptable delay resulted in Members of Parliament and the public not having timely access to important information.”

Mrs. Jacobs Matthews noted that her audit opinion on the financial statements of the Consolidated Fund for the year ended March 31, 2012 was qualified, as it had been in the previous three years, due to “serious deficiencies in internal control over the management of various development projects that occurred in the year ended March 31, 2009.”

She explained that the “deficiencies led her to question the appropriateness of certain transactions and the underlying value of assets as at March 31, 2009.”

Without the benefit of an independent professional valuation which was to be undertaken by the Accountant General for the current year under audit, the Auditor General advised that “she is still unable to determine whether adjustments might be necessary to tangible capital assets and the accumulated deficit as at March 31, 2012”.

The Auditor General also highlighted the section of her Independent Auditor’s Report entitled “Other matters”. She explained that “Other matters” do not represent a qualification of her Auditor’s Opinion, but is used to report significant matters that in her professional opinion should be brought to the attention of Parliament and to the public, as permitted by professional auditing standards and the Audit Act 1990.

The Auditor General said she “found it necessary to draw attention to the high level of net debt which stood at $2.4 billion as at March 31, 2012 [an increase of almost $350 million over March 31, 2011]. The Auditor General recommended that the Government take concerted action to address this fiscal challenge.

The “Other matters” section also draws attention to several incidences of non-compliance with the Government’s Financial Instructions, which form the standard for financial controls for the Government.

Mrs. Jacobs Matthews explained that, “Although these incidences of non-compliance did not lead me to qualify my audit opinion for the current year, I felt it necessary to stress the importance of the Government adhering to its internal control framework”.

The final part of the “Other matters” section of the Independent Auditor’s Report cautions readers that the usefulness of the financial statements of the Consolidated Fund for the year ended March 31, 2012 is limited.

“It is important that Parliament and the public understand that the Consolidated Fund financial statements cover only the financial results and position of Government ministries and departments, the House of Assembly, the Senate and the courts,” explained Mrs. Jacobs Matthews.

“They do not include the financial results or the financial position of other Government-controlled organizations, such as the Bermuda Hospitals Board, the Bermuda Housing Corporation, the Bermuda College, the Bermuda Land Development Company Limited and the West End Development Corporation, through which significant financial activities of the Government occur.”

The Auditor General cautioned that “Consequently, the Consolidated Fund financial statements do not represent the full nature and extent of the overall financial resources and liabilities of the Government of Bermuda”.

The Auditor General quotes the net debt at $2.4 billion, which is around a billion dollars higher than the general debt numbers often used. Bernews has attempted to seek clarity on this from the Auditor General and we will update as able

Update 8.44pm: The Auditor General has confirmed that net debt was $2.4 billion eleven months ago.

Where is Paula "principle" Cox ? Who caused all of this? Paula Cox Where is she? The principled one who did not resign when the others did. The one who was incapable, incompetent to the point where she called the election and lost her own seat. How dumb. She said she had testicular fortitude.....lie number one then they started to multiply.....she had and has NO testicles.... Where is she?

No we are not finished and eb is sitting down on the waterside in his home at collectors hill,the interesting part will be his so called book to tell al and his side of the story.

I have a name for his book but i will reserve the right to say so here,I just hope this government looks into many allegations of misuse of public funds,the unfortunate thing is that much of what is allegations,even if there are discrepencies will be found to be nothing because of the way it was done and all our antiquated laws does not make it possible for legal action to be taken on the white color crimes that is believed to have taken place by several people.

Now before some jack rabbit says I am accusing someone in particular,I have not labelled anyone but will say that if you lay the cheese you will get a mice and if you put down rat poison,you are sure to catch the rats and kill it.

"They do not include the financial results or the financial position of other Government-controlled organizations, such as the Bermuda Hospitals Board, the Bermuda Housing Corporation, the Bermuda College, the Bermuda Land Development Company Limited and the West End Development Corporation, through which significant financial activities of the Government occur.”

Hate to see the final picture when the above results are finally able to be audited.

@ oh this is funny: If the Auditor General didn't have full access to the figures, there is no way Mr. Richards would have had the full picture. Besides that is not the question you need to be asking. We want to know how come Ms Cox didn't know or never said the truth? Can we get it back? One thing you can be sure of Mr. Richards' fingers weren't in the pie.

Not yet I am afraid... numerous 'big spender' ministries are NOT included in the $2.4B we know of... for instance the new hospital is 'off the books' as is presumably the $1.0B underfunding of pensions. Given that governments figures are well out of date already thanks to the previous government I suspect a current 'all in' figure including hospital and pension shortfall will be closer to $4.5B. Maybe Government should start a lottery to see who can guess what the real number is????

It will be good to see the details of the financial statements for the year ended March 31, 2012 to understand the Auditor's comments.

As ususual we have the naysayers about the $2.4b net debt but without more detail it is impossible to make informed comments.

The fact that the statements do not include WedCo, BHC, BHB, BLDC etc is not new. They have never included those entities and former Auditor General (Larry Dennis) often made the same comment that has been repeated by Mrs. Matthews.

To assist the public it is very important for the Auditor to clarify the composition of the extra $1b net debt. One assumption is that she is referring to employee related obligations such as pensions, vacation and health insurance benefits.

Debt is debt - the only issue is whetehr it was propoerly reported in the past. You appear content wiith 2.4 billion debt so long as the 'new categories'are in fact new. It makes no difference to those outside looking in, nor to the fact that we must, if even possible, repay it. So say the 'naysers', from reality.

The current minister of finance wasn't the minister at that said date therefore he did not have full access to all financial records. I doubt the Auditor General is confused, she is still in the process of receiving more and more pertinent financial details as she also did not have full access. I'm sure, actually, i'm certain there is more to come.

methinks YOU may be confused. look at the date - bob richards was not the finance minister then. he had to go on what we all thought was TRUTHFUL information, at the time. you really didn't put that together? such a shame. you're such a good cut and paster.

The PLP will have a response...just need to think about it over the weekend, but heres a couple of likely responses: " This is still sustainable debt..." " The new Government is exaggerating the figures to vilify the PLP." "The is a result of 400 years of slavery which must be addressed..." (Rolfe's obvious response to everything that will arise!) " Look how much the OBA have run up the debt already with their management of the peoples money" (David Burt) " If we legalize weed this will all be better...and manna will fall from the sky" Marc Bean. "It wasn't me!!!!" Derek Burgess " Nothing to do with me..." Derek Burgess "Investment in our people" Zane Desilva... All absolute nonsense but Green followers will sigh with relief and lap it all up!!!

Can anyone advise what would have been said about the Auditor General's Report if the Auditor General was still Larry Dennis? I think we can safely guarantee that these posts would be flooded with allegations of bias, racism and "plantation mentality". By any measure Heather Jacobs Matthews is a class act who is doing an excellent job as our Auditor General.

Or maybe because there's no possible way Bob could have an accurate picture without access to the PLP's finances and time to review them. The PLP is a billion dollars more in debt (rather the Bermudian people are a billion dollars poorer) than we knew about. End of story.

Lol did you read the article? Particularly where it says "preliminary numbers". Preliminary, as in before, prior to looking at them in depth. But then again, you apparently support a party that runs up over 2 billion dollars worth of debt (at least).

seriously? bob richards JUST took control of the purse strings and doesn't even have all of the information as of yet, and you are comfortable accusing him of lying?? really?? but somehow you are ok with having been lied to and mislead for 14 years. you are ok having watched the lavish spending of the plp government, the trips, the parties, the mismanagement of pensions etc etc.... and you are ok with a government that took bermuda from having almost NO debt to more than TWO BILLION dollars?? how stupid people in bermuda are is so sad. really sad. you should change your name because you are not funny at all.

you really must be thick. BOB RICHARDS DIDN'T HAVE ACCESS TO THE ACTUAL FIGURES UNTIL THE LAST FEW WEEKS....he was the SHADOW finance minister - that means he was not ANY part of preparing the statements and had to go on what he was being TOLD by the PLP FINANCE MINISTER. we all assumed she was giving clean reports with real figures....obviously not. they withheld alot of information. it is coming out now. GET IT NOW??????

And 40 grand from each of us? Sell the SUV? Mortgage the house? How are we going to pay this off?

I smell tax increases in next year's (non-election-year) budget!!!

We need to burn the people who obviously have money; i.e. big gas guzzling cars, liquor 'n cigarettes, land tax on big mansions and big boats.

Speaking of boats; When the PLP were in goverment they dropped the import duty (to 22%) on boats as they thought that encouraging people to bring in new boats would create work for marine based businesses. But new boats do not tend to need much work especially if they are well maintained. You will create more work in the marine industry if you raise the import duty, forcing people to buy locally, and that will create work for the marine industry. There is no shortage of boats locally. Most boat yards are over-flowing with boats. Go to South Side in St. Davids opposite the Police Station. Some of those vessels have not moved for 10 or more years.

Do you read what you write???? All those boats sitting in storage yards are there running up storage fees. Nothing else. Dreams have turned into financial nightmares. Few boats, even at 22%, are being brought in. Even fewer are being sold locally even at prices far less than importing same boat from the US.

More fallout from 14 years of PLP government. A boat is not a necessity so it is the first thing that money gets cut from.

@Eastern. I agree with you. I don't own a boat but I'd sure like to have one and have been researching prices. For most people having a boat is a luxury item. It surprised me that more tax revenue is not generated from duties and annual licensing/moorings. Don't get me wrong, I don't like paying higher taxes but $2.4B dollars in debt means we will all pay more and have fewer services. And all this while we are trying to increase our tax base by welcoming IB back to the island. A monumental task... And very frightening to imagine the reaction from those who have not yet grasped the new realty.

PS. You can stop taxing my plastic kayak though! If a person can single handedly lift his floating craft above his head he should not have to pay an annual licensing fee!

I haven't seen the Cog since the election. I've seen the col, and a few others. She is a civilian now so I was hoping run into her in the aisle of the supermarket so that I can look at her in disgust like i do to members of the opposition when I see them.

We need to "follow the money" to see who got from the numerous Government contracts that breached the Financial Instructions laws, which the Auditor General had told us last year amounted to more than $150 million in cost overruns. God only knows how high that amount is now.

For years Paula Cox refused to give the Auditor General the power to subpoena the books and records (including bank records) of Government contractors to see whether they were giving kickbacks....

The OBA must give the Auditor General that subpoena power so that we can find out who was getting money. That information will not only help send the guilty to prison for a long time (under Section 111 of the Criminal Code and under the money laundering provisions of the Proceeds of Crime Act) but it will allow the Government to freeze the assets of the guilty and get back any stolen money.

OBA Government, please act asap to give the Auditor General subpoena power and request a Commission of Inquiry to do a proper investigation.

We need to do this before the guilty can spend any more of the money....

The question I have is can we get any of that money back? Can we file charges? Is such major under reporting, hiding of information illegal. Can we seize and sell assets? Our roads clearly indicate that they were not a part of the "investment in infrastructure."

Must we pay pensions to people who were so grossly negligent with this country's finances? At the very least the Finance Minister who must have known we were being raped and maybe was one of the perpetrators should experience some severe consequences.

The 1.4 billion relates to loans, overdrafts etc, the further 1 billion relates to pension shortfalls and these can increase,decrease depending on markets, but contributions would need to increase to bridge this figure. The government should be looking at the very expensive final salary calculations for pensions, one of the very few governments still paying pensions by this method. The audit dept are not blameless in delay of accounts. They do not issue audit plans, delay starting audit, have poorly trained staff and take too long reviewing accounts. They are the poorest audit department I have ever encountered.

they are frightened! EB had our last AG effing ARRESTED!!! arrested for trying to ascertain the truth and get some answers! EB is the type of person the green regime are putting forward is a great guy! Lord help us! until people can come forward with what they know without fear of EB or Colonel sending the goons out to get'em then we'll be stuck.

Would that have anything to do with the way they were hounded out of their offices under a pervious administration and re-settled in what I seem to recall were diabolical conditions? And has the AG's office not been complaining for several years about being denied access to information from a former Government? I presume when you say "poorest" that you mean poor conditions rather than quality of staff.

But Zane said that project was ' all under budget'. And he should know, since he was Health Minister. Perhaps he forgot to let the Finance Minister know what the real facts were. After all, there were, and still are, various factions in the PLP who hate each other's guts.

Generally limited experience in relevant government audits, lack of IT knowledge they do not have an IT audit specialist. And very poor all round finance skills, a lot of audit time is spent getting auditors up to speed, rather than spending time on actual audit.